Chevron to Participate in Athabasca Oil Sands Project Expansion
SAN RAMON, Calif., Oct. 26, 2006 -- Chevron Canada Limited, a subsidiary of Chevron Corporation (NYSE: CVX), has elected to participate in the first phase of expansion of the Athabasca Oil Sands Project (AOSP).
This is a 100,000-barrels-per-day (Chevron share, 20,000 bpd) expansion of oil sands mining and upgrading facilities in the Canadian province of Alberta, and it is subject to final regulatory approvals.
AOSP is a surface mining operation currently producing about 155,000 barrels of bitumen per day. It began operations in April 2003. Chevron owns 20 percent of the project
The total capital cost estimate for this expansion is $10 billion US, with Chevron's share at $2 billion. It is envisioned that this expansion will increase design capacity to more than 255,000 bpd in 2010.
"This investment bolsters our global effort to expand production," said George Kirkland, executive vice president, Upstream and Gas, Chevron Corporation. "Chevron has one of the industry's strongest queues of major capital projects to support its long-term growth strategies, and we will be actively working on other opportunities in the Canadian oil sands in the years ahead."
"Chevron is supportive of the AOSP expansion proposal and the efficient development of the reserve's potential," added Mark Nelson, president, Chevron Canada Limited. "Effective project execution will be required in order to maintain schedule and control costs."
AOSP consists of the Muskeg River Mine located in Alberta north of Fort McMurray, and the Scotford Upgrader located near Edmonton. The Corridor Pipeline links both facilities. Chevron owns 20 percent of the project. Shell Canada Limited, operator, owns a 60 percent share and Western Oil Sands L.P. owns 20 percent.
This phase of expansion includes construction of mining and extraction facilities at the Jackpine Mine; expansion of froth treatment facilities at the existing Muskeg River Mine; and expansion of the Scotford Upgrader.
The Jackpine Mine received federal and provincial cabinet approvals in 2004. The Scotford Upgrader expansion received Alberta Energy and Utilities Board approval in September 2006. A regulatory decision on the Muskeg River Mine expansion is anticipated prior to year-end.
Chevron Canada is actively seeking a leadership position in Canadian heavy oil. In addition to its interest in AOSP, Chevron Canada is operator of the Ells River Appraisal Project, which includes more than 75,000 acres with an estimated 7.5 billion barrels of oil in place about 20 km west of Fort McKay, Alberta. The resource must be recovered using Steam-Assisted Gravity Drainage (SAGD) or other in-situ technologies.
Chevron Corporation is one of the world's leading energy companies. With more than 53,000 employees, Chevron subsidiaries conduct business in approximately 180 countries around the world, producing and transporting crude oil and natural gas, and refining, marketing and distributing fuels and other energy products. Chevron is based in San Ramon, Calif. More information on Chevron is available at www.chevron.com.
CAUTIONARY STATEMENT RELEVANT TO FORWARD-LOOKING INFORMATION FOR THE PURPOSE OF "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995.
Some of the items discussed in this press release are forward-looking statements about the development of oil sands in Alberta, Canada. Words such as "estimated," "planned" and similar expressions are intended to identify such forward-looking statements. The statements are based upon management's current expectations, estimates and projections; are not guarantees of future performance; and are subject to certain risks, uncertainties and other factors, some of which are beyond the company's control and are difficult to predict. Among the factors that could cause actual results to differ materially are changes in the demand for and supply of crude oil and natural gas; actions of competitors; the potential disruption or interruption of project activities, due to war, accidents, political events, civil unrest or severe weather; and general economic and political conditions. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Unless legally required, Chevron undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
U.S. Securities and Exchange Commission (SEC) regulations define reserves associated with oil sands as mining-related and not a part of conventional crude oil and natural gas reserves. U.S. investors should refer to disclosures about Canadian oil sands net proved reserves in Chevron's Annual Report on Form 10-K for the year ended December 31, 2005, filed with the SEC on March 1, 2006.
Updated: October 2006